I am seeing a few; I said a few; homeowners get checks for as much as $30,000 at the close of escrow for short selling their home. That’s correct, $30,000 if the homeowner agrees to a short sale.
Why on earth would a bank pay someone and take less than the amount of the existing loan? It’s like hitting the lottery for a homeowner that’s underwater.
I’ve tried to find out how a homeowner gets selected for that program. After much reading and research, I have found an answer.
The answer is…..it’s a secret. That’s right, it’s a secret. No one will say how the selection process works for getting cash back when you short sale your home.
That only leaves us to speculate why such large amounts of cash are being paid, but only to selected short sellers.
Hum?? Could it be that the bank can’t find the paperwork that would allow a foreclosure to be completed? Is that why the bank called with a very generous cash offer for the homeowner’s co-operation in a short sale?
Don’t tell anyone what I am thinking, “It’s a secret!”
Garey
Wednesday, February 22, 2012
Wednesday, January 4, 2012
Now Is The Time
2012 is likely the best year you are going to get to obtain a mortgage. Rates are as good as it gets for 10 year/15 year/30 year fixed rates for a home loans.
There are already hints that you could see rates start to rise mid year 2012.
Home prices are said to be under valued by 23% taking in to account historic ratios of disposable income and housing prices. Homes have not been this undervalued since 1975.
Home buyers or investor, it is clear, buy in 2012.
There are already hints that you could see rates start to rise mid year 2012.
Home prices are said to be under valued by 23% taking in to account historic ratios of disposable income and housing prices. Homes have not been this undervalued since 1975.
Home buyers or investor, it is clear, buy in 2012.
Monday, December 19, 2011
Some Facts / Some Opinions
There are 117 million households in the U.S.
40.5 Million Rent
52.6 Million own with a loan
23.4 Million own outright
After almost 5 years in this market and a 6 trillion dollar loss in home equity, little has been accomplished by way of a recovery for housing. All of the programs sponsored by the federal government have been largely ineffective.
During the past 5 years more than 3 million families have lost their home. 6.4% of mortgages made between 2004 and 2008 have ended in foreclosure and an additional 8.3% are at immediate risk. On top of that, approximately 18% of Fannie and Freddie loans are underwater, and before I forget, 44% of the loan modifications that were granted are more than 3 months late. Don’t overlook the estimated 4.2 million homes in the shadow inventory that exists.
As we look at 2012, I don’t see great things happening that will revive the market. The political environment seems to be letting the chips fall where they may. Fannie, Freddie, F.H.A are all underwater themselves. The new HARP 2.0 program may help some underwater homeowners, but not before mid March or April 2012. 43% of homes in the Inland Empire are underwater.
What can we look forward to in 2012?
- Low interest rates will continue.
- The idea that if we hang on prices will come back is gone. Sellers that are not underwater and have equity will proceed to the market place.
- We still have lots of people wanting to buy. Remember with 9% unemployment, 91% are still working.
- Buying is now cheaper than renting.
- Investors are very actively buying.
- Prices we haven’t seen in years will attract home buyers and investors.
- Short sales are much easier to complete and getting easier everyday.
- The lenders are now initiating short sales first.
- REO inventory will increase after the 1st of the year.
There are something’s that might be on the horizon. The biggest is principle reductions. They could be implemented by lenders; at the discretion of the Fed; or by bankruptcy judges or some other way. The odds are increasing that principle reductions will find its way into the cards next year. Remember, this will be a Presidential Election year.
One thing is for sure, the shadow inventory will begin to clear out. The banks need the cash and the Feds are through kicking the can down the road because that has not worked either. If it’s in your plan to own rentals, you have about the next 2 years to buy them.
40.5 Million Rent
52.6 Million own with a loan
23.4 Million own outright
After almost 5 years in this market and a 6 trillion dollar loss in home equity, little has been accomplished by way of a recovery for housing. All of the programs sponsored by the federal government have been largely ineffective.
During the past 5 years more than 3 million families have lost their home. 6.4% of mortgages made between 2004 and 2008 have ended in foreclosure and an additional 8.3% are at immediate risk. On top of that, approximately 18% of Fannie and Freddie loans are underwater, and before I forget, 44% of the loan modifications that were granted are more than 3 months late. Don’t overlook the estimated 4.2 million homes in the shadow inventory that exists.
As we look at 2012, I don’t see great things happening that will revive the market. The political environment seems to be letting the chips fall where they may. Fannie, Freddie, F.H.A are all underwater themselves. The new HARP 2.0 program may help some underwater homeowners, but not before mid March or April 2012. 43% of homes in the Inland Empire are underwater.
What can we look forward to in 2012?
- Low interest rates will continue.
- The idea that if we hang on prices will come back is gone. Sellers that are not underwater and have equity will proceed to the market place.
- We still have lots of people wanting to buy. Remember with 9% unemployment, 91% are still working.
- Buying is now cheaper than renting.
- Investors are very actively buying.
- Prices we haven’t seen in years will attract home buyers and investors.
- Short sales are much easier to complete and getting easier everyday.
- The lenders are now initiating short sales first.
- REO inventory will increase after the 1st of the year.
There are something’s that might be on the horizon. The biggest is principle reductions. They could be implemented by lenders; at the discretion of the Fed; or by bankruptcy judges or some other way. The odds are increasing that principle reductions will find its way into the cards next year. Remember, this will be a Presidential Election year.
One thing is for sure, the shadow inventory will begin to clear out. The banks need the cash and the Feds are through kicking the can down the road because that has not worked either. If it’s in your plan to own rentals, you have about the next 2 years to buy them.
Friday, October 7, 2011
The Feds Need to Take Housing Head On!
The policies of the Feds are dead in the water and have been from the start.
Seven times new programs have been approved to help solve the national housing issues. Each time the rules kept most homeowners from qualifying. These programs all sounded good at first glance, but were so restrictive that they were dead on arrival.
What we need is a good short sale program in which the systems work and Realtors, Homeowners, and Buyers could have some confidence that a short sale is worth pursuing.
We also need a refinance program to help existing underwater Homeowners refinance into today's low interest rates. Many Homeowners are still making their payments even though they owe more than the home is worth in today's market. If they want to help the economy, allow these folks to refinance based upon credit scores and the mortgage being current; not the current value of the home. Instead, base the refinance on the value system of the Homeowner.
Addressing these two issues would help put some stability into housing. But if they really want to fix things; repeal Dodd-Frank.
Our overall economy can not grow as long as Dodd-Frank exists. If Dodd-Frank is not repealed, you ain't seen nothing yet.
Seven times new programs have been approved to help solve the national housing issues. Each time the rules kept most homeowners from qualifying. These programs all sounded good at first glance, but were so restrictive that they were dead on arrival.
What we need is a good short sale program in which the systems work and Realtors, Homeowners, and Buyers could have some confidence that a short sale is worth pursuing.
We also need a refinance program to help existing underwater Homeowners refinance into today's low interest rates. Many Homeowners are still making their payments even though they owe more than the home is worth in today's market. If they want to help the economy, allow these folks to refinance based upon credit scores and the mortgage being current; not the current value of the home. Instead, base the refinance on the value system of the Homeowner.
Addressing these two issues would help put some stability into housing. But if they really want to fix things; repeal Dodd-Frank.
Our overall economy can not grow as long as Dodd-Frank exists. If Dodd-Frank is not repealed, you ain't seen nothing yet.
Friday, September 23, 2011
Uncle Sam is Your New Best Friend!
If you have a job, $7,000 and good credit and are renting, pay close attention.
A typical $200,000 house will rent for something around $2,000 per month, plus or minus.
If you can buy at these low interest rates, check out these numbers.
Sales Price: $200,000, FHA financing
Down Payment: $7,000
Insurance: $72.38 per month
Real Estate Taxes: $208.33 per month
Mortgage Insurance: $184.96 per month
Principal and Interest: $902.75
Total Payment: $1,368.42
And you are renting?? These numbers are based on an interest rate of 3.75%
If your rent is $2,000 a month, you can save over $600 per month if you buy it plus deduct the interest on your taxes!
These numbers are for demonstration purposes only. These numbers are not a quote for lending purposes. See your lender for actual figures.
What this demonstrates is Uncle Sam may be your new best friend!
A typical $200,000 house will rent for something around $2,000 per month, plus or minus.
If you can buy at these low interest rates, check out these numbers.
Sales Price: $200,000, FHA financing
Down Payment: $7,000
Insurance: $72.38 per month
Real Estate Taxes: $208.33 per month
Mortgage Insurance: $184.96 per month
Principal and Interest: $902.75
Total Payment: $1,368.42
And you are renting?? These numbers are based on an interest rate of 3.75%
If your rent is $2,000 a month, you can save over $600 per month if you buy it plus deduct the interest on your taxes!
These numbers are for demonstration purposes only. These numbers are not a quote for lending purposes. See your lender for actual figures.
What this demonstrates is Uncle Sam may be your new best friend!
Monday, September 19, 2011
Increase in Foreclosures
Large lenders will double their foreclosures on the west coast. They own far too many houses for the health of their own bottom line.
This will also mean that short sale listings will be more prevalent as banks change the rules regarding extended stays for owners not making their payments.
Over the coming months banks will become much more aggressive towards defaults, short sales and foreclosures.
To understand some of the issues banks are facing, think about the fact that B of A paid 2.5 billion for Countrywide. Now their legal fees are over 30 billion regarding those loans.
They need to clear out their inventory and the courts have cleared the way for them to move forward.
Cash is key for banks right now!
This will also mean that short sale listings will be more prevalent as banks change the rules regarding extended stays for owners not making their payments.
Over the coming months banks will become much more aggressive towards defaults, short sales and foreclosures.
To understand some of the issues banks are facing, think about the fact that B of A paid 2.5 billion for Countrywide. Now their legal fees are over 30 billion regarding those loans.
They need to clear out their inventory and the courts have cleared the way for them to move forward.
Cash is key for banks right now!
Monday, August 1, 2011
It’s About Payment, Not Price!
For Buyers who are waiting for prices to fall, they should focus on two metrics, price and interest rates.
What the majority of buyers focus on is price and only price.
Consider this:
On a $200,000 mortgage @ 4.5% interest, the monthly payment is $1,013 per month. At 5.5% the payment is $1,136 per months. That’s a 12% increase in monthly payment. At 6.5% interest the payment is $1,265. That’s a 25% increase.
If you are in the market to buy a home consider price, then consider the actual value of today’s interest rates.
If prices fall another 10%, but interest rates rise 1%, fewer home buyers will be able to qualify to buy a home.
My advice, buy now and more importantly, lock your loan.
Garey
gteeters@coldwellbanker.com
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